Iran says six-month extension of nuclear talks may be needed

GENEVA/DUBAI (Reuters) - Iran's talks with world powers on curbing its nuclear programme in exchange for an end to sanctions could be extended for another six months if no deal is reached by a July 20 deadline, a senior Iranian official said.

U.S. and Iranian officials held talks in Geneva on Monday to tackle ways of breaking a deadlock which has raised the likelihood that the deadline will lapse without a deal meant to head off the risk of a Middle East war over the nuclear issue.

But while the diplomacy continues doubts still remain over whether Tehran and Washington can in the end overcome their longstanding differences.

The negotiations ran into difficulty last month with each side accusing the other of making unrealistic demands, raising doubts about prospects for a breakthrough next month.

An extension should be possible, but President Barack Obama would need to secure the consent of Congress at a time of fraught relations between his administration and lawmakers.

Iran, the United States, Britain, France, Germany, Russia and China included the July 20 deadline to reach a comprehensive agreement in an interim deal they reached in Geneva on Nov. 24.

The November agreement - under which Iran suspended some nuclear activities in exchange for limited sanctions relief - allowed for a six-month extension if more time were needed for a settlement. An extension would allow up to half a year more for limited sanctions relief and restraints on Iranian nuclear work.

Western officials say Iran wants to maintain a uranium enrichment capability far beyond what is suitable for civilian nuclear power stations. Iran says it wants to avoid reliance on foreign suppliers of fuel for planned nuclear reactors and rejects Western allegations it seeks the capability to make nuclear weapons under the guise of a peaceful energy programme.

Iranian Deputy Foreign Minister Abbas Araqchi spoke of a possible extension to the talks in remarks in Geneva to Iranian media on the sidelines of meetings with senior U.S. officials and the European Union's deputy chief negotiator.

"We hope to reach a final agreement (by July 20) but, if this doesn't happen, then we have no choice but to extend the Geneva deal for six more months while we continue negotiations," Araqchi was quoted as saying by Iran's state news agency IRNA."

"It's still too early to judge whether an extension will be needed. This hope still exists that we will be able to reach a final agreement by the end of the six months on July 20."

The No. 2 U.S. diplomat, Deputy Secretary of State Bill Burns, and Under Secretary of State Wendy Sherman, the primary U.S. negotiator with Iran, met an Iranian delegation led by Araqchi in Geneva on Thursday.

U.S. State Department deputy spokeswoman Marie Harf said the "wide-ranging" session ran for over five hours. "They will reconvene tomorrow morning and expect to meet all day," she told reporters in Washington, as part of consultations before the next round of Vienna negotiations scheduled for June 16-20.

Araqchi, speaking later to the Iranian student news agency ISNA, described the atmosphere of Monday's talks with the Americans as "positive and constructive".

"THE PLACE WE WANT TO BE"

"We are at a critical juncture in the talks," Harf said. "We don't have very much time left. We think we've made progress during some rounds but as we said coming out of the last one we hadn't seen enough made, we hadn't seen enough realism.

"Hopefully these discussions, like the other bilateral discussions people have, can help get us to the place we want to be," Harf said.

A French diplomatic ?source said officials from France and Iran would meet on Wednesday to discuss the Vienna negotiations. And Russian officials will have talks with the Iranians in Rome on Wednesday and Thursday, according to Iranian media.

"There are still gaps between Iran and the (six powers) in various issues and in order to bring our views closer, the other side must make tough decisions," Araqchi said.

"The goal of these negotiations was to secure the Iranian nation's rights in the nuclear issue for peaceful purposes," he was quoted as saying. "We hope that we will be able to achieve this in the remaining time under the six-month nuclear deal."

A second senior Iranian official, Takht Ravanchi, was quoted as saying that putting an end to sanctions was one of the issues discussed during the bilateral session with the Americans.

EU foreign policy chief Catherine Ashton is coordinating the six powers' talks with Tehran. Her deputy Helga Schmid is currently in Geneva for the bilateral meetings with Iran.

Separately, in a shift of tone from Prime Minister Benjamin Netanyahu's scepticism, a senior Israeli intelligence officer said on Monday that Iran was negotiating seriously on a deal to limit its contested nuclear activity.

(Reporting by Michelle Moghtader in Dubai, Dan Williams in Jerusalem, Parisa Hafezi in Ankara and John Irish in Paris; Writing by Louis Charbonneau; Editing by Mark Heinrich and Giles Elgood)